THIRUVANANTHAPURAM: With Governor Arif Mohammad Khan asking the Chief Secretary for an explanation about the financial situation of the state, Kerala is facing the threat of a financial emergency. The government is of the stand that there is no need to give an immediate reply to the Governor. The Governor has the power to recommend a financial emergency to the President. The Centre's stand will be crucial.
As the Chief Secretary had submitted an affidavit in the High Court stating that the state was facing a serious financial crisis, he cannot contradict this when he gives an explanation to the Governor. If he says that there is no crisis in the state, it would be tantamount to misleading the High Court.
The Governor can make a recommendation on his own if he does not get a reply from the Chief Secretary. If the reply gets delayed, the Governor will send another letter to the Chief Secretary. He will decide on whether to make the recommendation on his own after that. It remains to be seen if the Governor will be able to take such a step without the Centre's tacit approval.
The report should be sent to the Union Home Ministry. Three years ago, the Centre had warned that the financial situation of five states, including Kerala and Punjab, was not good. The Governor sought an explanation from the Chief Secretary based on the petition given by Save University Campaign Committee Chairman RS Sasikumar seeking to recommend the state of financial emergency.
The Kerala Administrative Tribunal had also directed the government to clarify when it will provide the five instalments of the dearness allowance to be paid to the government employees. Rs 18,000 crore is needed for this. It was pointed out in the petition given to the Governor that Rs 16,000 crore is due to public works contractors and Rs 1000 crore to Supplyco contractors. The Governor has demanded an explanation for all this.
Parliament needs to approve
1. According to Article 360 of the Constitution, a state of financial emergency will be imposed if recommended by the Governor and approved by the President. It will continue until withdrawn by the President.
2. Both Houses of Parliament must approve the financial emergency within two months. Therefore, the Centre's position is crucial. Restrictions can also be imposed without declaring an emergency. A state of financial emergency has not yet been invoked. Although imposing a financial emergency was considered in 1991, the then-government later decided against it.
Salaries may be cut short
1. The Centre will take full financial control of the state. Salaries and allowances of employees may be cut. This applies to judges as well.
2. The Centre will scrutinize the money bills and expenditure bills after they are passed by the state assembly.
Kerala is strong: Minister Balagopal
"As far as Kerala is concerned, all criteria of sustainable economic conditions are strong. The situation is such that the state's own income is increasing and borrowing is decreasing. This has also been agreed in the Parliament. It is also mentioned in the Reserve Bank report. But if we are still talking about the financial crisis, it is because of the denial approach of the Centre. That is what needs to be corrected," Finance Minister Balagopal said.